HDFC Bank’s MSME book grows 30% to cross Rs 2 trillion-mark

Geographically speaking, the bank is present in 630 districts, of these, 560 districts have MSMEs.

Mumbai: HDFC Bank’s MSME book grew 30 per cent year-on-year to cross the Rs 2-lakh-crore-mark as of December-end, mainly boosted by the pandemic-induced ECLG scheme under which it disbursed over Rs 23,000 crore.

The growth is also driven by a renewed push towards customers in semi-urban and rural areas, the bank has said. In December 2019, the bank’s MSME book stood at Rs 1.4 lakh crore, which has grown by over 60,000 crore or 30 per cent to Rs 2,01,758 crore by the December 2020 quarter, giving it a 10.6 per cent share system-wide MSME lending, becoming the second-largest lender in this segment after the State Bank of India, the bank added.

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“Our MSME lending is back to pre-pandemic levels, with loan book growing at 30 per cent year-on to Rs 2,01,758 crore as of the December 2020 quarter,” Sumant Rampal, senior executive vice-president, business banking and healthcare finance, at the bank told PTI on Friday.

“While the ECLG scheme was the biggest driver boosting the loan book by Rs 23,000 crore disbursed to around 1,10,000 MSME customers, our own renewed push towards customers in semi-urban and rural areas has also helped us during the pandemic, leading to an incremental loan growth of over Rs 60,000 crore,” he said, adding most of the ECLGS disbursals took place only in the past three-four months.

At 30 per cent loan growth, the MSME book is the fastest-growing vertical for the bank. “This is a testimony to our commitment to strengthen the MSME sector that accounts for about 30 per cent of GDP and the largest employer,” Rampal said.

“Our MSME portfolio is geographically balanced spread across all metropolitan cities, urban, semi-urban and rural regions. And we reached out to them with a suite of customised products which they could access conveniently either through physical or electronic channels,” said Rampal.

He said of their 5,500 branches, 1,800 of them have more than 25 per cent of their loans to MSMEs and 4,800 units service this segment of customers. Geographically speaking, the bank is present in 630 districts, of these, 560 districts have MSMEs.

There is no concern on the asset quality front for the bank, which has a history of having the lowest NPAs in the system. In December 2019, the MSME bad loans for the bank were just 0.48 per cent and Rampal said, anyway currently the entire ECLGS book is under mandatory moratorium.